Why San Fran leads the U.S. in corporate innovation

Yesterday I featured the Top Ten U.S. Cities for Corporate Innovation from Innovation Leader magazine, and I thought today you’d like to see the reason they selected San Francisco as the No. 1 corporate leader in innovation.

Here’s what Innovation Leader had to say:

Well before chip companies like Fairchild Semiconductor helped the peninsula between San Jose and San Francisco attain fame as Silicon Valley, companies like Wells Fargo (the PayPal of its day) and Levi Strauss & Co. (which made the first pair of blue jeans in 1873) were innovating here.

The original accelerator program, Y Combinator, holds regular “demo days” featuring startups that are developing electric airplanes and dermatology apps. Walmart Labs employs about 2,500 people to build software for the retailer’s digital channels, and a new incubator, Store No 8, will bring in entrepreneurs under the supervision of Jet.com founder Marc Lore, whose company was acquired by Walmart last year. Target’s Open House Store in San Francisco’s South of Market neighborhood features an array of new connected devices, from Adidas’ smart soccer ball to electric skateboards to coffeemakers. Not far off is a Verizon Innovation Center, focused on smart city technologies, and Visa’s One Market Center, where the company prototypes the future of payment with the help of its customers.

Tesla’s highly-automated factory in Fremont, Calif. relies on more than 150 robots, including some of the largest in the world.

Jim McCarthy, Visa’s Executive Vice President of Innovations, says that Visa’s management team moved into the facility in part so they can get a window on customer challenges. “In the nearly three years since One Market Center opened its doors,” he says, “we have honed our process for how we collaborate with our clients — tackling real-world challenges with real solutions built together.”

San Francisco stalwart Wells Fargo announced a major artificial intelligence initiative in February, and in March at the South by Southwest Interactive Festival, Levi’s unveiled a collaboration with Google: a denim jacket for commuters with navigation and phone controls built in.

In Menlo Park, the venture capital firm Andreessen Horowitz brings in executives from big companies, often CTOs and CIOs, for new technology briefings from startups in the Andreessen Horowitz portfolio. Incubators like Plug and Play Tech Center and Rocketspace offer opportunities for corporates to rub shoulders with the entrepreneurs who rent space there.

Tesla is in the midst of doubling the footprint of its massive and highly-automated factory in Fremont, across San Francisco Bay, in part to support production of its lower-priced Model 3 sedan.

Other carmakers, including Ford, General Motors, Volkswagen, and Mercedes-Benz have their own R&D facilities peppered around the area.

In the world of entertainment, San Francisco can lay claim to Netflix, Lucasfilm (now part of Disney), Pixar, YouTube, and Dolby Laboratories, which constantly rolls out new technologies to cinemas and home theaters. Life sciences companies like Celgene, Bayer, Illumina, and FibroGen have flocked to the city’s Mission Bay neighborhood to be close to the University of California at San Francisco—so much so that a 2016 headline blared “Biotech Hotspot is Running Out of Room.”

Down in Palo Alto, Stanford University’s StartX accelerator helps students and alumni build companies, and the affiliated Stanford-StartX Fund has, as of 2017, invested in roughly 225 ventures. At Berkeley, open innovation guru Henry Chesbrough teaches, writes, and helps oversee the Garwood Center for Corporate Innovation.

Let’s not forget the companies founded by Steve and Steve (Apple), David and Bill (Hewlett-Packard), Zuck (Facebook), Gordon and Robert (Intel), Larry & Sergey (Google), Travis (Uber), and Ev and Jack (Twitter.) Or big conclaves like TechCrunch Disrupt, Dreamforce, Lean Startup Week, and Oracle OpenWorld. As a result, the Bay Area easily walks off with the top spot on our list.